Attitude Adjustment: Using Behavioral Data to Boost Direct Mail Response
Since the dawn of direct marketing, companies have tried to determine what will entice prospects to buy. While demographic and financial data have been a trusted resource, behavioral data is taking direct mail to new heights. The explanation is fairly simple: What customers and prospects actually do is much more enlightening than what they say they will do. In direct marketing, it is far better to build a campaign around truth than conjecture, and customer behavior is one of the best sources of "truth" you can get.
Behavioral data is the result of measuring and recording prospect or customer behavior. As marketers, we constantly measure the behavior of our customers in the form of response rates, inquiries, web pages viewed or new sales. We look at percentages such as close rate (the percentage of new customers resulting from a gross volume of response). Acronyms such as GRR (Gross Response Rate, the total number of respondents to a promotional effort such as a direct mail piece), NRR (Net Response Rate) and many others are a standard part of our business.
Most of us know that testing is a critical part of what we do, and that improvement in results is directly tied to our ability to understand what is working and what is not. That means measuring what our prospects and customers do with the direct mail packages we send.
We commonly use behavioral data to determine when other specific behaviors are most likely to occur. We build models based on this data to answer questions such as: How often will a group of people respond to a promotion? How many will respond, and how many will buy? We use past performance and statistics to project the likely response to future promotions. All of this is dependent upon proper collection of data, and specifically, the most basic behavioral data: Response and sales data. So here is a quick primer on how we as marketers can use this information to improve response, provide greater testing capabilities, reduce risk and perhaps even create longer customer tenure.